ACIT CENTRAL CIRCLE 3(2), MUMBAI vs. GREENSCAPE REALTY LLP, MUMBAI

3. On the facts and circumstance of the case and in law, the Ld.CIT(A) failed to appreciate the findings of the investigation wing wherein the statement of the principal person of the group, Shri Pravin kumar Jain was recorded in which he categorically admitted that the entire business of accommodation entries in through him and companies under his control and it had been established after due verification that the concerned entities have provided accommodation entries.”

AY 2014-15: “1. "Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred in directing the AO to delete the addition made u/s 68 of the IT Act, 1961 amounting to Rs. 12,81,00,000/- without property appreciating the fact of the case and that the addition was made based on the Survey Action carried out u/s 133A in the case of assessee company by the investigation Wing and on the basis of enquires carried in the course of survey proceedings, post survey proceedings and in the course of assessment proceedings" 2. "Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred the Ld. CIT(A) erred in holding that the assessee had discharged its burden under section 68 despite overwhelming evidence against the genuineness and creditworthiness of the lender entities" 3. "Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred in directing the AD to delete the addition amounting to Rs. 24,61,059/-without properly appreciating the fact of the case and that the addition was related to the interest paid on non-genuine transaction in the form of unsecured loan" 4. "Whether on the facts and circumstance of the case and in law, the Ld. CIT(A) failed to appreciate the findings recorded by the AO, elaborately discussed in the assessment order, which were based on enquiries carried out in the course of assessment proceedings and back by investigation carried out by the Investigation Wing and on the basis of statements recorded in the course of S&S Action and Survey action of the principal person of the group. Shri Pravin Kumar Jain& Jitendra Kumar Jain and other, wherein, they had catatonically admitted that they have provided accommodation entries.”

AY 2015-16: 1. "Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred in directing the AO to delete the addition made u/s 68 of the I T Act, 1961 amounting to Rs. 4,00,50,000/- without properly appreciating the fact of the case and that the addition was made based on the Survey Action carried out u/s 133A in the case of assessee company by the investigation Wing and on the basis of enquires carried in the course of survey proceedings, post survey proceedings and in the course of assessment proceedings." 2. "Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred the Ld. CIT(A) erred in holding that the assessee had discharged its burden under section 68 despite overwhelming evidence against the genuineness and creditworthiness of the lender entities" 3. "Whether on the facts and circumstance of the case and in law, the Ld. CIT(A) failed to appreciate the findings recorded by the AO, elaborately discussed in the assessment order, which were based on enquiries carried out in the course of assessment proceedings and back by investigation carried out by the Investigation Wing and on the basis of statements recorded in the course of S&S Action and Survey action of the principal pension of the group, Shn Pukhraj Ladulal Pokharana and other, wherein, they had categorically admitted that they have provided accommodation entries."

AY 2016-17: “1. Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred in directing the AO to delete the addition made u/s 68 of the IT Act, 1961 amounting to Rs. 6,36,50,000/- without properly appreciating the fact of the case and that the addition was made based on the Survey Action carried out u/s 133A in the case of assessee company by the investigation Wing and on the basis of enquires carried in the course of survey proceedings, post survey proceedings and in the course of assessment proceedings? 2. Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred the Ld. CIT(A) erred in holding that the assessee had discharged its burden under section 68 despite overwhelming evidence against the genuineness and creditworthiness of the lender entities"

3. Whether on the facts and circumstance of the case and in law, the Ld. CIT(A) failed to appreciate the findings recorded by the AO, elaborately discussed in the assessment order, which were based on enquiries carried out in the course of assessment proceedings and back by investigation carried out by the Investigation Wing and on the basis of statements recorded in the course of S&S Action and Survey action of the principal person of the group. Shri Pukhraj Ladulal Pokharana and other, wherein, they had categorically admitted that they have provided accommodation entries."

AY 2017-18: “1. "Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred in directing the AO to delete the addition made u/s 68 of the IT Act, 1961 amounting to Rs. 14,22,12,451/- without properly appreciating the fact of the case and that the addition was made based on the Survey Action carried out u/s 133A in the case of assessee company by the investigation Wing and on the basis of enquires carried in the course of survey proceedings, post survey proceedings and in the course of assessment proceedings" 2. "Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred the Ld. CIT(A) erred in holding that the assessee had discharged its burden under section 68 despite overwhelming evidence against the genuineness and creditworthiness of the lender entities" 3. "Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred in directing the AO to delete the addition amounting to Rs 79,03,874/-without properly appreciating the fact of the case and that the addition was related to the interest paid on non-genuine transaction in the form of unsecured loan"

AY 2017-18: “1. Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred in directing the AO to delete the addition made u/s 68 of the I T Act, 1961 amounting to Rs. 5,45,00,000/- without properly appreciating the fact of the case and that the addition was made based on the credible information received from Investigation Wing? 2. Whether on the facts and circumstance of the case and in law the Ld CIT(A) erred the Ld. CIT(A) erred in holding that the assessee had discharged its burden under section 68 despite overwhelming evidence against the genuineness and creditworthiness of the lender entities.”

AY 2018-19: “1. Whether on the facts and circumstance of the case and in law the Ld. CIT(A) erred in directing the AO to delete the addition made u/s 68 of the I T Act, 1961 amounting to Rs. 79,00,000/- without properly appreciating the fact of the case and that the addition was made based on the Survey Action carried out u/s 133A in the case of assessee company by the investigation Wing and on the basis of enquires carried in the course of survey proceedings, post survey proceedings and in the course of assessment proceedings? 2. Whether on the facts and circumstance of the case and in law the Ld.CIT(A) erred the Ld. CIT(A) erred in holding that the assessee had discharged its burden under section 68 despite overwhelming evidence against the genuineness and creditworthiness of the lender entities?”

AY 2020-21: “Whether on the facts and circumstance of the case and in law the Ld. CIT(A) is correct in holding that interest expenses claimed by the assessee on the non-genuine unsecured loan is an allowable expenses, once it is hold that the loans taken by the assessee were genuine and disallowance made by the AO u/s 68 of the IT Act, treating these unsecure loan as unexplained cash credit were deleted by him in the appellate order passed for the A.Y. 2018-19, when the facts are that the Ld. CIT(A) decided this appeal of the assessee in its favor on technical issues and without discussing the case on merits of addition made by the AO u/s 68 of the IT Act.” 2.1. These set of eight appeals by the Revenue are in respect of three different assesses forming part of the same group. Issues raised in respect of all the three assesses in these set of eight appeals are identical except for variation in the quantum of addition/disallowance which relates to addition made u/s. 68 on account of unsecured loan and disallowance of interest thereon. Since, the issues raised are identical, all these eight appeals are taken up together for adjudication by passing this consolidated order. The issues raised in respect of each of the assesses and the quantum of addition made in all these eight appeals is tabulated below for ready reference:

3.1. Reassessment proceedings were undertaken and assessee furnished corroborative documentary evidences to explain this genuineness of transaction. Ld. AO primarily relied on the search action undertaken in the case of Shri Pravin Kumar Jain and his statement recorded during the course of his search which took place on 01.10.2013. Ld. AO thus, concluded that assessee had obtained accommodation entries in the form of unsecured loans from the group concerns of Shri Pravin Kumar Jain which are bogus concerns. According to him, assessee could not prove the genuineness of transaction. He thus, treated this as bogus unsecured loans and made the addition thereof. Details of addition of Rs. 12 Cr. made by the ld. AO in the reassessment proceedings in respect of unsecured loans taken from entities belonging to the Shri. Pravin Kumar Jain Group is as under:

3.2. In the first appeal before the ld. CIT(A), assessee made elaborate submissions. It was submitted that assessee is engaged in the business of real estate and shown its income from the said business activity. In respect of addition of Rs. 12 Cr. made by the ld. AO, assessee furnished correct factual position for the transactions undertaken by it which is tabulated below:

3.3. It was thus, contended that the actual amount of loan received from the said parties is Rs. 8.50 Cr, fact of which was brought to the notice of ld. AO, in the course of assessment proceedings itself by way of reply dated 07.12.2019. However, ld. AO, proceeded to complete the assessment by solely relying on the information received from DIT (I&CI). In order to discharge its onus casted u/s. 68 to established the identity and credit worthiness of the lenders and prove genuineness of transaction, assessee furnished detailed submissions along with corroborative documentary evidences. For the purpose of establishing the identity of lenders assessee filed copy of ITR acknowledgement. It also furnished details of registration of these lender companies under the Companies Act. The details so furnished are tabulated below:

3.4. For the purpose of establishing creditworthiness of the lender companies, assessee furnished their audited financials and summarized their financial position as tabulated below. It demonstrated that all these lender companies had sufficient balance in their accounts so as to enable them to lend the money to the assessee. Assessee also furnished copies of bank statements of these lender companies which also evidently proved the creditworthiness of these lender companies. The details in this respect are tabulated below:

3.5. For the purpose of demonstrating the genuineness of transaction, it was submitted that all these loan transactions including payment of interest and repayment thereof were effected through proper banking channel which is evidently verifiable from the copies of bank statements placed on record. Due TDS was done on interest payments to each of these lender parties.

3.6. Assessee also contended that ld. AO did not undertake any independent enquiry u/s. 133(6) despite having all the material on record. He chose merely to rely on the information received from DIT (I&CI) arising from the search action carried out in the case of Shri Pravin Kumar Jain, who is an unrelated party to the assessee. Assessee also, demonstrated from the documentary evidences that loans were repaid in the subsequent period, including discharge of interest liability thereon.

4. Ld. CIT(A) after carefully considering all the submissions made by the assessee, took note of the discrepancy in the addition made by the ld. AO which was factually demonstrated by the assessee that the loans taken by the assessee during the year is of Rs. 8.50 Cr. and not Rs. 12 Cr. He thus, deleted the addition of Rs.3.5 Cr. out of the Rs.12 Cr. on account of factual incorrectness. Ld. CIT(A) also took note of the orders of Co-ordinate Bench of ITAT in several cases were the lender companies have been held to be genuine. Details in this respect is as below: (i) GM/s Duke Business Pvt. Ltd. - ITA No: 1477/Mum/2017 dated 20.11.2018 in the case of Shree Ganesh Developers OME TAX DEPARTMENY (ii) M/s Josh Trading Pvt. Ltd. - ITA No: 2567/Mum/2022 dated 09.01.2023 in the case of Hemang Goradia (iii) M/s Atharv Business Pvt. Ltd. -- ITA No: 2567/Mum/2022 dated 09.01.2023 in the case of Hemang Goradia (iv) M/s Sumukh Commercial Pvt. Ltd. - ITA No: 1477/Mum/2017 dated 20.11.2018 in the case of Shree Ganesh Developers.

4.1. From the aforesaid listed orders of various Co-ordinate Benches, ld. CIT(A) observed that in these decisions, detailed analysis has been done in respect of additions made on the basis of statement of Shri Pravin Kumar Jain, to arrive at a conclusion that these stated companies are not shell companies as they satisfy the essential ingredients of Section 68. Further, on the requirement of discharging primary onus casted u/s. 68, it was noted by ld. CIT(A) that assessee has furnished the following documents: i) Acknowledgment of Income Tax Return filed ii) Loan confirmation iii) Audited Financial Statement iv) Bank Statement of the lenders 4.2. Thus, assessee had discharged its primary onus of establishing the identity and creditworthiness of lender parties and the genuineness of loan transaction. From the perusal of the bank statement of lender parties, ld. CIT(A) noted that these accounts did not show cash deposits prior to the issuance of cheques/RTGS transfer of unsecured loans to the assessee. He also observed that even though the transactions are with tainted group, the entities in question have already been subject matter of adjudication before the Co-ordinate Benches of ITAT, wherein it has been held that the loans given by these entities are genuine. On the contention of the assessee that no opportunity of cross examination was provided to it while placing reliance on the statement of Shri Pravin Kumar Jain recorded during the course of his search, it was observed that principles of natural justice need to be applied by the Income Tax Authorities during the assessment proceedings. Accordingly, material relied upon by the ld. AO to make addition must be brought to the notice of the assessee. However, in the present case no such material or opportunity was made available to the assessee while taking an adverse view. Further, it is noted that no defects have been found in the books of accounts nor any discrepancies or short coming pointed in the detailed submission and corroborative evidence placed on record. Having considered all these aspects, ld. CIT(A) deleted the addition of the remaining Rs.8.5 Cr. and allowed the appeal by the assessee.

5.1. It is noted that all the lender companies are Income-Tax assessees, filing their Income-Tax return, unsecured loan has been given through proper banking channel for which copies of bank statement of the lender companies are placed on record, for none of the transactions there are any deposit of cash before extending loan to the assessee and all the lender companies have substantial creditworthiness for the purpose of advancing loan to the assessee.

5.2. Considering the facts and the circumstances of the case and the material placed on record, we find that assessee has discharged its onus to prove the identity and creditworthiness of the lender companies and the genuineness of transaction. In respect of unsecured loans obtained by it, we do not find any reason to interfere with the elaborate fact-based findings arrived at by ld. CIT(A) for deleting the addition made by the ld.AO. We have also perused various judicial precedents relied up on by ld. CIT(A) in his first appellate order while granting the said relief which holds the fort in favor of the assessee. Accordingly, grounds raised by the Revenue in this respect are dismissed.

ITA No. 4593/Mum/2014-15

7.1. For these lender companies also, assessee established their identity and creditworthiness and proved genuineness of the transaction. Relevant details in this respect are tabulated below for the purpose of identity.

7.2. For the purpose of creditworthiness, the financial position of these lender parties is tabulated below: Name of the investor Amount invested Share capital and reserve in appellant & surplus with investor company parties along with borrowings as on 31.03.2014 M/s. Manhar Impex Pvt Ltd. Rs. 70,00,000/ 200.06 Crs. M/s. Ganga Gems Pvt Ltd. Rs.2,60,00,000/- 58.19 Crs M/s. Rajdhani Diamonds Pvt Ltd Rs.3,65,00,000/- 52.20 Crs. M/s. Pokhrana Impex Pvt Ltd Rs. 1,75,00,000/- 49.63 Crs. M/s. Kapil Gems Pvt Ltd. Rs.4,01,00,000/- 38.27 Crs.

7.3. It is observed that these lender companies have also been alleged by the ld. AO to be entities controlled and managed by Shri Pravin Kumar Jain. However, ld. CIT(A) took note of the fact about number of decisions by Co-ordinate Bench of ITAT wherein these lender parties have been held to be genuine. These decisions are listed below: (i) ITA No: 1477/Mum/2017 dated 20.11.2018 in the case of Shree Ganesh Developers (ii) ITA No: 5589/Mum/2017 ACIT 30(3) Vs. M/s Shreedham Construction Pvt. Ltd. (iii) ITA No:3596 & 3597/Mum/2019 dated 27.04.2022 in the case of DCIT Vs M/s Rupa Properties and Securities Pvt Ltd (iv) ITA No: 3647/Mum/2017 in the case of ITO 4(2)(4) Vs Khushboo Exports Pvt Ltd (v) ITA No: 437/Hyd/2016 in the case of Komal Agrotech Pvt Ltd Vs ITO (vi) ITA No: 369/Mum/2017 dated 13.04.2017 in the case of Anil Chhaganlal Jain (vii) ITA No: 37541/Mum/2017 dated 14.11.2017 in the case of M/s Shreedham Construction Pvt Ltd. 7.4. Thus, on similar facts, findings and observations, ld. CIT(A) deleted the addition made in respect of unsecured loan u/s.

ITA No. 4594/Mum/2025 AY 2015-16

8.1. Details of loan taken by the assessee:

8.2. For these lender companies also, assessee established their identity and creditworthiness and proved genuineness of the transaction. Relevant details in this respect are tabulated below for the purpose of identity.

8.3. For the purpose of creditworthiness, the financial position of these lender parties is tabulated below:

ITA NO. 4675/Mum/2016-17

9.1. Details of loan taken by the assessee:

Sr. Name of the party Amount as per Amount as per Difference No. AO (in Rs.) Books (in Rs.) 1 M/s. Ganga Gems Rs. Rs.

Pvt Ltd 1,50,00,000/- 1,50,00,000/- 2 M/s. Secure Exim Rs.20,00,000/- Rs.20,00,000/- - Pvt Ltd 3 M/s. Pamecha Rs.40,00,000/- Rs.40,00,000/- Exim Pvt Ltd. 4 M/s. Aera Exports Rs.2,00,00,000/- Rs.2,00,00,000/- Pvt Ltd 5 M/s. Rajdhani Rs.30,00,000/- Rs.30,00,000/- Diamonds Pvt Ltd. 6 M/s. Pokharna Rs.31,00,000/- Rs.31,00,000/- Impex Pvt Ltd. 7 M/s. Gurukul Exim Rs.94,00,000/- Rs.74,00,000/- Rs.20,00,000/- Pvt Ltd 8 M/s. Dolex Rs.71,50,000/- 0 Rs.71,50,000/ Commercial Pvt Ltd. Total Rs.6,36,50,000/- Rs.5,45,00,000 Rs.91,50,000/ 9.2. For these lender companies also, assessee established their identity and creditworthiness and proved genuineness of the transaction. Relevant details in this respect are tabulated below for the purpose of identity.

Name of Parties PAN CIN Sr. No. 1 M/s. Ganga Gems Pvt Ltd AADCG6620Q U36912GJ2010PTC0593 2 M/s. Secure Exim Pvt Ltd. AAUCS0399F U51909GJ2013PTC0780 3 M/s. Pamecha Exim Pvt AAECP6913E U52393GJ2008PTC0539 Ltd. 4 M/s. Aera Exports Pvt Ltd. AANCA4296Q U51103GJ2015PTC083085 5 M/s. Rajdhani Diamonds AAECR6968B U36911GJ2010PTC059975 Pvt Ltd. 6 M/s. Pokharna Impex Pvt AABCP7359P U51900MH1998PTC115082 Ltd 7 M/s. Gurukul Exim Pvt Ltd AAFCG4510K U36912GJ2013PTC077934 8 M/s. Dolex Commercial Pvt AAACD5527G U67120MH2003PTC085669 Ltd 9.3. For the purpose of creditworthiness, the financial position of these lender parties is tabulated below:

Name of the investor Amount Share capital and reserve & invested in surplus with investor parties appellant along with borrowings as on company 31.03.2016 M/s. Ganga Gems Pvt Ltd. 1,50,00,000 81.13 Crs. M/s. Secure Exim Pvt Ltd. 20,00,000 61.99 Crs. M/s. Pamecha Exim Pvt Ltd, 40,00,000 19.51 Crs. M/s. Aera Exports Pvt Ltd 2,00,00,000 56.81 Crs. M/s. Rajdhani Diamonds Pvt Ltd. 30,00,000 75.54 Crs. M/s. Pokhama Impex Pvt Ltd. 31,00,000 81.91 Crs. M/s. Gurukul Exim Pvt Ltd 94,00,000 116.79 Crs M/s. Dolex Commercial Pvt Ltd. 71,50,000 64.22 Crs.

ITA No. 4687/Mum/2025 AY 2017-18

10.1. Details of loans taken by the assessee are:

10.2. For these lender companies also, assessee established their identity and creditworthiness and proved genuineness of the transaction. Relevant details in this respect are tabulated below for the purpose of identity.

10.3. For the purpose of creditworthiness, the financial position of these lender parties is tabulated below: Name of the investor Amount invested Share capital and reserve & in appellant surplus with investor company parties along with borrowings as on 31.03.2017 M/s. Manan Trading Co. Pvt Ltd Rs.3,17,75,000/ 32.54 Crs. M/s. Manhar Impex Pvt Ltd. Rs. 8,10,000/- 100.13 Crs M/s. Secure Exim Pvt Ltd Rs. 30,00,000/- 61.64 Crs. M/s Aera Exports Pvt Ltd Rs. 62.80 Crs. 1,00,00,000/- M/s Adroit Exports Pvt Ltd Rs.3,41,00,000/- 13.034 Crs. M/s Myron Trade Pvt Ltd Rs. 1,80,00,000/ 7.70 Crs M/s Galary Trading Pvt Ltd. Rs. 14.44 Crs. 1,70,00,000/- M/s Rightangle Diamond Pvt Ltd Rs. 50,00,000/- 193.86 Crs. M/s Gurukul Exim Pvt Ltd Rs. 20,00,000/- 162.55 Crs. M/s. Anshul Gems Pvt Ltd. Rs. 7,46,420/- 26.59 Crs M/s Dolex Commercial Pvt Ltd Rs. 71,50,000/- 16.41 Crs. M/s Kapil Gems Pvt Ltd Rs. 27,31,031/- 31.64 Crs M/s Shyam Alcohol & Chemicals Rs. 99,00,000/- 18.204 Crs. Ltd 10.4. It is observed that these lender companies have also been alleged by the ld. AO to be entities controlled and managed by Shri Pravin Kumar Jain. However, ld. CIT(A) took note of the fact about number of decisions by Co-ordinate Bench of ITAT wherein these lender parties have been held to be genuine. These decisions are listed below: (i) ITAT, Mumbai in the case of DCIT Vs. M/s Rupa Properties and Securities Pvt Ltd in ITA No: 3596 & 3597/Mum/2019 dated 27.04.2022 (ii) ITAT, Mumbai in the case of ITO 4(2)(4) Vs Khushboo Exports Pvt Ltd in ITA No: 3647/M/2017 (iii) ITAT, Mumbai in the case of Komal Agrotech Pvt Ltd Vs ITO in ITA No: 437/Hyd/2016 (iv) ITAT, Mumbai in the case of Anil Chhaganlal Jain in ITA No: 369/Mum/2017 (v) ITAT, Mumbai in the case of M/s Shreedham Construction Pvt Ltd in ITA No: 3754/Mum/2017 dated 14.11.2017 AY 2017-18 11. We now take up appeal in the case of Greenscape Reality LLP for AY 2017-18 in wherein similar addition has been made on account of unsecured loan of Rs.5.45 Cr. from one party Adroit Exports Private Limited. Basis of addition made by the ld. AO is identical to the one already discussed in above paragraphs, in the case of Greenscape Developers Private Limited. Details furnished by the assessee in respect of the lender company is tabulated below:

Name of the investor Amount invested in Share capital and reserve & appellant company surplus with investor parties along with borrowings as on 31.03.2017 M/s Adroit Exports Pvt Ltd Rs.5,45,00,000/- 18.18.crs 11.1. For this lender company also, assessee established its identity and creditworthiness and proved genuineness of the transaction. Relevant details in this respect are tabulated below for the purpose of identity.

11.2. Identical fact pattern exists in respect of the addition made. Accordingly, observations and findings given by us, including that by ld. CIT(A) applies mutatis mutandis. Thus, grounds raised by the Revenue in this respect are dismissed.

12.1. For these lender companies also, assessee established their identity and creditworthiness and proved genuineness of the transaction. Relevant details in this respect are tabulated below for the purpose of identity.

12.2 For the purpose of creditworthiness, the financial position of these lender parties is tabulated below:

12.3. Identical fact pattern exists in respect of the addition made. Accordingly, observations and findings given by us, including that by ld. CIT(A) applies mutatis mutandis. Thus, grounds raised by the Revenue in this respect are dismissed.

ITA No. 4568/Mum/2025 AY 2020-21

Order pronounced in the open court on 26.11.2025.